[Abrupt Start]….superior customer experiences by providing intelligent incident response and operational automation that increase uptime, reduce costs, and improves customer satisfaction. As customers expand their use of PagerDuty beyond DevOps, the platform tackles workflows across the enterprise and for multiple personas; technical, executive, back office, or front office wherever critical unstructured work arises. This enables leaders to keep their teams focused on forward-looking innovation that drives end customer trust and ultimately revenue and growth. We innovate successfully across use cases and departments. And as we do that, PagerDuty grows from the foundation of digital infrastructure to enterprise-wide operations cloud, a company's primary platform for engagement. Our platform is seamless to deploy and purpose built to manage the increasingly complex environments and time-critical challenges underpinning the digital economy. In Q3, we continued to grow both our foundational presence in DevOps and IT and our functional use cases horizontally and vertically up to executive leadership. We successfully executed against the $36 billion total addressable market within our customer base and have created multiple engines for durable growth as well as deepened our competitive moat. Increasingly effective execution of our land and expand motion against strong demand from enterprise and mid-market as well as a favorable competitive environment saw third quarter financial results exceed the high end of our guidance ranges and consensus with revenue for the quarter at a PagerDuty record $72 million and our non-GAAP operating margin improving by 400 basis points over last year also ahead of guidance and consensus. In addition, new customers in the enterprise and mid-market segments grew 13% year-over-year during the quarter. And the number of customers spending more than $100,000 in ARR with PagerDuty grew 35% year-over-year. With the backdrop of favorable macro conditions including digital acceleration, the talent shortage requiring increased productivity, increasing cyber…

Thank you, Jen, and good day to everyone joining us. Our financial results for Q3 demonstrate our continued momentum and success in becoming the operations cloud for the modern enterprise. Consistent execution in the enterprise and mid-market led to another strong quarter with revenue of $72 million, an increase of 33% year-over-year and above the high-end of our guidance range. International revenue grew at 36% and represents 24% of total revenues. Our high dollar-based net retention rate at 124% is driven by consistent user expansion, plan upgrades and new product purchases. Our rate of 124% compared to 119% in the third quarter of last year was at the high-end of the range that we guided to in our Q2 call. We expect net dollar-based retention to fluctuate from quarter-to-quarter and are confident we will achieve at or above 120% in Q4. We ended Q3 with 14,486 paid customers, up 6% compared to a year ago. As a result of focused targeting, our product innovation and go-to-market efforts, we saw paid enterprise and mid-market customers up 13% year-over-year. In addition, the number of total companies on the platform exceeded 19,000 at the end of the quarter, up 29% compared to a year ago. You may recall when we introduced our free tier a year ago, our intention was to drive focus on higher-value logo acquisition in the enterprise and mid-market and remove barriers for entry in SMB. This is working well as we see good growth in enterprise and mid-market and strong growth in overall companies on the platform, with a more efficient land motion for startups and SMBs. General strength and momentum in enterprise and upper mid-market continued in Q2 as 543 customers achieved more than $100,000 of ARR on PagerDuty, up 35% compared to a year ago. The growth…

Before you do that Howard, I was going to make some closing remarks if that's okay.

Sure.

So very quickly, I just wanted to summarize. Q3 was a terrific quarter with continued momentum, accelerating annual growth and a confident outlook, driven by a positive macro environment, product innovation and room to expand in our base, great execution by our teams. We have become the standard for incident response, providing a strong core business that we are building on top of – that we're building new products and services on top of. And our business grows durably as we advance our position as the operations cloud for the modern enterprise. With that I will turn it over for questions. Sorry about that.

Thank you, Jen.

Excellent. Thank you. We're going first to Sterling Auty with JPMorgan. Sterling, go ahead, please.

Yes, thanks. Hi, guys. So I think it was about this time last year, you talked about the freemium model, so just pricing in general. Just curious, did you make any modifications at this point this year? And how are you thinking about that moving forward?

Well the freemium model has continued to be a great learning and kind of growth opportunity for us as a business. Remember, our original goal was to make it easier for developers and the most disruptive startups to leverage PagerDuty and build that into their infrastructure. And as you know we have very strong retention. So as those customers grow, it creates the opportunity for us to grow with them. What that's done, by automating that part of the funnel, it's freed up resources to focus on more expansive mid-market and enterprise customers. And that's allowed us to learn more and more about how we can push our high-velocity motion upmarket, which has created some great efficiencies for us. So we continue to learn but we're really happy with how the free trial – or how the free tier is working, alongside of our free trial, which converts our customers to paid as well.

And then, Howard, one follow-up for you, in terms of noticed the incremental operating margin, the incremental operating leverage that you generated not only in the quarter, but also in the guidance for the fourth quarter. Is that purposeful, or where are you in kind of your hiring plans?

Yes. Thanks, Sterling. It certainly is purposeful. We, in fact, have been doing really well in terms of hiring. Q3 was a record hiring quarter for us, which of course covered across the business, engineering sales, and other functions as well. But we have been looking at how do we deliver better efficiency in terms of sales and marketing and G&A. We're obviously always trying to keep our R&D expenditure around the 25% of revenue, which we expect to do within Q4, but certainly been looking for efficiencies in the other two areas without compromise on the growth opportunity.

Make sense. Thank you.

Thanks, Sterling.

Thank you. We'll go to Rob Oliver with Baird next.

Hi. This is Shrenik Kothari on for Rob. He had a conflict sorry. So, you announced the Rundeck Cloud and AWS partnership a couple of weeks back. And so just curious, how Rundeck is doing at the new logos? Is that still a factor or is it still kind of more expansions with existing accounts. So, I think that's a question for Jen maybe.

Thanks for the question. Well, first of all, really excited about both the announcement of PagerDuty automation available in a cloud offering. We think that opens up opportunities for customers that prefer to deploy through the cloud as opposed to in their own environment, and Rundeck has continued to perform very well in terms of both, new customer land and expansion. I think most important bringing automation into our platform alongside of incident response AIOps and now customer service operations really makes the platform much more complete as a total Operations Cloud for a customer and really differentiates the platform competitively. So, we're happy with how that is going. Equally, I'm really thrilled with the way our partnership with AWS has advanced. So, we've historically worked with AWS in Marketplace. We've doubled down with them from a go-to-market perspective. Customers can retire AWS committed spend on PagerDuty licenses, and now the AWS sales force can also retire quota against PagerDuty consumption. So, a great channel opportunity for us and that's continued to be a very good relationship for us from both a product and a go-to-market perspective. So, excited on both fronts.

Thanks, Jen. Really helpful. So just a quick follow-up for Howard here. So, I remember you mentioned that the expansion rate last quarter had some contribution from the joint customers from Rundeck as well. So I just wanted to understand the dynamic there like the NRR coming at the high end of your guide. Can you unpack that a little bit vis-à-vis Rundeck and comps?

Yes, sure. So I think just for context, Rundeck remains -- like from a size perspective, it doesn't move the needle materially in terms of the dollar-based net retention. So I think you have to see it in the context of our larger business, which is now over $300 million in ARR. But certainly, the contribution is there and we're seeing both the expansion with customers acquiring Rundeck. And one customer that comes to mind for me this quarter was Zscaler, who had been a digital operations customer and then added the automation -- PagerDuty automation for Rundeck into the mix for them, so that they can broaden their footprint to be able to cover all the way from detection to order remediation in delivering like a good experience. So, we're definitely seeing that motion happening where the existing PagerDuty customers are adding to their footprint with us by adding automation. But it's just in general across the Board upgrading the plans, taking on the new products and adding new users is contributing to that really strong DBNR.

Got it. Thanks a lot Howard and Jen. Congrats again for the great quarter.

Thank you.

Thank you.

Thank you. Next we'll be hearing from Keith Weiss at Morgan Stanley.

Excellent. Very nice quarter, guys. And thanks for taking the question. I have one for Jen and then one for Howard. Jen, you talked about a favorable competitive environment in the quarter. Does that denote anything has changed in the competitive environment, or is that more so a PagerDuty comment that, with sort of the product innovation you guys are putting out, you've expanded sort of the competitive gap and then that's what you guys are benefiting from?

Well, we continue to see land, the greenfield, as we have in the past. And in fact, we've seen the competitive environment improve, where, because of the breadth of the platform we're not seeing as much discussion around other vendors, because there isn't anybody that's bringing AIOps and automation and incident response together. So, frankly, it's improved and we're thrilled to see the investments that we've made particularly in mid-market and enterprise from a product perspective payoff. And again, I think, it's an early and nascent market. Our customers still have a lot of work to do to support their digital-first sort of customer experiences. And I think PagerDuty is the right platform at the right time to help them solve some of those new problems that they're experiencing.

Got it. Outstanding. And, Howard, actually two questions for you. One is just a clarification. Can you just walk us through the pull-forward dynamics that you were talking about in terms of billings for Q4? I just want to make sure that we're clear on that. And are there any other kind of periods of pull-forward that we should be aware of? And then the actual -- that's just a clarification. The question is the durability of dollar-based net expansion. You've had multiple quarters of really good dollar-based net expansion. Is the mid-120s, is that a more durable rate on a go-forward basis now?

All right. So I'll start with billings and then I'll come back to the dollar-based net retention. So in terms of billings, the adjustment that I was referring to there was really around, in Q4 of last year we had unusually high growth in billings for the quarter at 41%. And part of that was driven by $6 million of early renewals which would have renewed in Q1 of the next year. Obviously, those are going to renew in Q4 of this year. So we don't have that same benefit. So if I back out that $6 million and do a comparison on a trailing 12 months' basis, in fact, we will exit the year at around 30% in terms of billings growth. So that was a pull forward. And we're not anticipating anything unusual like that is coming this quarter.

Perfect.

And then, on the dollar-based net retention, 124% is a really strong result. And we think that for companies that's our size and scale being able to deliver a sustainable 120% is best-in-class. And so, for us, we are focusing our efforts on maintaining that level. And this will be -- Q4 will be our fifth quarter of being above 120%.

Excellent. Thank you very much, guys. Great quarter.

Thanks, Keith.

Thanks, Keith.

Hearing next from Chad Bennett with Craig-Hallum.

Great. Hey, guys. Thanks for taking my questions.

Hey, Chad.

Hey. So I guess just on digital ops plan and how that performed relative to expectations in the quarter, it's still putting up really good growth, but obviously decelerated from doubling year-over-year last quarter to 65%. And I think, as a percentage of ARR at 22% it's kind of been here. Just, kind of, how did that perform whether it's from a net new logo sales standpoint or from a net expansion standpoint? And how do you expect that probably more importantly to grow over the next year?

Yes. So I'll take that Jen and you can chime in. So we are really happy with the performance of our digital operations plan. It ties in really closely with the long runway that we had with our customers in terms of, as they progress through the different phases of digital operations maturity, the digital operations plan becomes a very natural fit to help them move to those more proactive and predictive approaches. So for almost every customer that we have, there's this opportunity for them to expand by taking on the digital operations plan. So we continue to see really good momentum with the digital operations plan. We had multiple upgrades on the digital operations plan within the core, the customers going from business to digital ops as well as new lands. So there's good momentum there. We feel that 22% of our total ARR represents a real indication of product attach, if you like, and we expect to continue to see that perform well.

Okay. And then -- I don't know -- I'll give this a shot. But can you speak to enterprise net expansion in the quarter, Howard, or if it was at 130% range or?

Yes. So for this quarter we decided just to focus in terms of our metrics to make sure that it was easier and clearer for people to focus on the overall view, which is the view that we've shared at the 124% range for the quarter. Q – Chad Bennett: Okay. And then maybe last one if I could. So we're up to almost 550 customers over $100,000 in ACV I guess you'd call it. Obviously, you have a significant number of paid customers. Is there any reason to believe, over the next couple of years that over $100,000 cohort -- it's been growing kind of mid-30%. It seems like we're still like, first second inning where that should grow at that growth rate for the next few years. Is that too aggressive?

So what I would say is, that we've seen a very steady increase every quarter, right? Obviously, it's -- and that's been very predictable. It's part of our durable growth as a company, is the fact that we continue to see customers moving through the cohorts. And we don't always share the numbers above $500,000 and above $1 million but we see a similar pattern of customers making that progress. And so again it ties into the very long runway that we have with the majority of our customers to be able to continue to do that. So we don't anticipate that that would -- should suddenly change. We will continue to grow our customers and see that they'll continue to add products add users take our more advanced offerings. Q – Chad Bennett: Got it. Thanks so much. Nice chat on the quarter.

Thank you, Chad

Thank you. Next we'll hear from Derrick Wood with Cowen. Derrick if I could have you switch on your video

Yeah. Great. Thanks. Good to see you team, PagerDuty

Hi, Derrick

First one, for Jen. I think you mentioned that you had a landmark quarter in customer service. Could you just double-click what was special about this quarter? Why you're seeing maybe adoption kicking into a new gear? And perhaps comment on, what kind of early demand you're seeing with the Salesforce offering.

Yes. We're really excited about where we are from a customer service perspective because when you build an adjacent product based on kind of this analogous problem set, like if you think about how tech teams detect and deal with incidents, it's very similar to how customer service teams learn about customer issues and have the time-sensitive challenge of having to like diagnose them, figure out how to deal with them and then communicate them. And so PagerDuty is a natural fit for that problem. And Salesforce has been a terrific partner in helping us bringing together, what we can do from a mission-critical time-sensitive work automation perspective within Salesforce Service Cloud. What's been really exciting to see are some of the larger wins that we've experienced. So one in particular I mentioned in my prepared remarks, was a Fortune 50 company where we did a seven-figure deal that created -- was created and closed in the quarter through a reference from another executive. And I think it just points to how strategic customer service has become in a world where you have to win the customer over and over again and demonstrate trust and build their loyalty in a few seconds of a customer experience. If that doesn't work well it's very costly for the company. This quarter that particular customer expanded from more of a traditional PagerDuty implementation to our -- adding our customer service offering. And that's seen them really reduce the existence of these code red issues that make their way all the way up to leadership where it's not a very efficient way to handle a problem, if you have to get your executive team involved in it. And so you're saving time you're saving money you're improving the overall executive experience. And I think what was exciting about that was, like I said, it was kind of a self-referencing deal. And we see Salesforce and that partnership as creating a tremendous opportunity because they are all over enterprise and they are the platform of record for customer service and customer management. So we're pretty excited about that. And what's interesting about the product is, you can do all the things that you can do inside of PagerDuty without leaving Service Cloud environment. So no context switching, easy to use in a time-sensitive environment and very quick time-to-value. So I think even at this particular customer more expansion opportunity.

Perfect. Great to hear. Howard, maybe one for you. It looks like the new customer generation has stepped up nicely the last couple of quarters. I know these are probably -- a lot of them are at the lower end, but can you remind us to how quickly you tend to maybe strike an expansion deal after you land a new customer? And then -- so given that uptick in new customer generation, does that give you better visibility into growth in future quarters?

It absolutely does. And I think this has been the beauty of the free tier for us because what that does is that it gives us visibility into that customer's life cycle earlier than we would have previously. Because with our two-week trial that we had before, at two weeks if they didn't convert, they were gone, like we didn't see them. Whereas now we actually have them using the product and we're getting far better at understanding the signals that indicate when a salesperson needs to be involved. And so often we are able to watch that maturation process until they land. And it's not unusual for us to see a customer do multiple expansions in their first 12 months. So, they'll often start with maybe if it's a smallish company, they may start with a small team, maybe 10 users, maybe 20 users. But then they do within the first 12 months as they bring more teams on to the platform, there's a good spurt of growth. And then obviously depending on the size of the organization and depending on what's happening in the organization it could then be driven by increased plan or plan upgrades or increased product adoption. And what we also find is that we often -- we still typically start in dev and often dev takes us into other parts of the business. And that is a pattern that we just repeat every quarter in terms of getting there. And the example that Jen referenced of Guidewire is a really good example of us being in the dev team then into the IT team, into business teams, into the executive. It's a pattern that we see repeated.

Great. Well done and congrats.

Thank you. Thanks Derrick.

Thanks Derrick.

Next you will hear from Matt Swanson with RBC. Matt, go ahead.

Yes, thank you. So, obviously on for Matt Hedberg. Obviously, really great to hear about all the success in CS. So, maybe following up on Derrick's question and your answer Jen about the analogous problem set. When we think about beyond CS security and IT ops is there a fourth use case where you see kind of the same themes that show as a logical adjacency maybe finance or HR? Like you mentioned the talent shortage is pretty broad right now and it seems like a lot of people can use your help.

Yes, you're exactly right. And there are infinite use cases across the enterprise and business operations. We've seen them in sales marketing. Our teams are pretty ingenious even in how they use PagerDuty. And I think the common thread is you're talking about this shift in the way work shows up for an individual person. It used to be structured. You used to walk in and look at your calendar in the office and just go from one meeting to the next. Now, a lot of work that comes at you is unpredictable. It's unstructured. It requires collaboration across teams across the business who are not within swivel chair reach to where you are and requires intelligent routing and orchestration and increasingly more and more automation. Because every company I work with is looking to improve productivity over time and retain the people that they have and make sure they can up-level those people's work to the most important most innovative work. And so that's where I think automation has become really important. I think you're going to continue to hear more about the challenge of time-sensitive customer service issues. Today there was a public cloud outage and companies are depending increasingly on public cloud services on SaaS products. And software is imperfect. And those systems that you rely on are out of your control. When one of them isn't having a good day you need to be able to very quickly detect that issue, understand the dependencies of those services, and not just respond from a technology perspective, but be able to communicate with your customers and help them understand kind of where you are in that arc. And you don't want to be in the doghouse with your customers because one of the services that you subscribe to fail and that's where PagerDuty being scalable and resilient and secure and always available in an environment like that is super important. For instance, during the outage that happened this morning we saw more than eight times the event transit on the platform and didn't flinch. Like we can undertake a lot of pressure in our system because of all of the redundancy that we built into that product. And that also allows us I think to be reliable for other different types of use cases whether it's employee onboarding and off-boarding managing, web conversion from a growth marketing perspective or managing urgent issues in finance or other parts of the business. So the more we can do to make our platform flexible, to make it easy to use, to reduce the sort of developer jargon that's in the UX and make it easier for just all types of employees the better. And automation is a big part of that.

That's great. And then maybe as a follow-up -- actually as a follow-up to that question sometimes kind of a rarity. From your Analyst Day, you talked a little bit about automation as a new zone in the customers. And as this talent shortage feels less like something you can like push through for a couple of months and new -- kind of more like a new normal which is another overused buzzword now, are you seeing automation being the new land into customers? And what is that doing maybe from like a sales philosophy standpoint?

We are. And I think it's very early days for us, because a number of the automation use cases that Rundeck is designed for and that it has managed very effectively have nothing to do with incident response. That's obviously a place where our sales organization will naturally go. But because our automation solution starts with an open source community there's opportunity to discover lots of different new automation use cases and then trade up into our enterprise offering. So I do believe that can continue to be a new land opportunity for us. And over time part of the reason we've built a cloud-based automation services so we can also build a freemium funnel and try to buy motion that is self-surface over time. That is not something we've done yet, but I think a great opportunity for us to build out that land motion in the future for automation.

All right. Fantastic. Yes. It seems like you could build your product roadmap for you over time. Congratulations on the quarter.

Thank you.

Thanks Matt.

[Operator Instructions] Bhavan Suri we'll hear from next. Please put your camera on. Thanks.

Great. Thanks. Thanks for taking my question. I wanted to follow-up on the previous questions Jen a little bit. You bought Rundeck, but you're talking a lot about automation. I'd love to...

Bhavan, I think you're muted. We lost you.

Yes, odd. I don't know why I'm muted. But anyway, where does the lines you want to draw about what you're automating versus a broader automation platform. So IT Ops, DevOps there's broad automation platforms in their service. Now there's a ton of automation. You've got some of these workflow orchestration engines that do that too. And so where do you draw the line today? And maybe does that line blur and you start taking over some of those markets? How should we think about how your vision is 10 years down the road?

Yes. Our vision as the operations cloud is to take on more and more of the time-sensitive unstructured mission-critical work that has to happen across an organization. And that is not functionally or use case-specific. Like we absolutely intend to expand our surface area across the enterprise, and we specialize in that unexpected, kind of unpredictable, unstructured work because of our ability to be able to diagnose it and intelligently route it orchestrate it across teams and increasingly automate the response not just the detection or the orchestration. But that's a really important point that we have always been in the automation business. We maybe didn't characterize it that way. But if you think about what we do using 625 integrations and sort of listen and see everything that's going on in the digital ecosystem to find signal in the noise and determine whether something is a major incident about to happen or an event storm about to become a major incident or actually something you shouldn't worry about and should just hit the snooze button on, like that's a form of automation. Intelligently routing that work to the right six people instead of getting 100 people on a call that's automation, and increasingly like every time an incident or an event runs on the PagerDuty platform the platform is capturing that information in our proprietary data set, learning from it and getting smarter and helping you institutionalize getting smarter as a company on how you respond and increasingly like proactively prevent bad things from happening but maybe also address opportunities in a more time-effective way and more efficient way for your team. So automation has always been a big part of PagerDuty strategy and is going to continue to be a very big part of where we go. And I think one of the differences between us and maybe the ticketing systems and the project management solutions that are out there is that we were designed for distributed teams. We are cloud-native from the beginning. We interoperate with just about everything in the ecosystem. We're flexible and very easy to use. So it means you can swarm to something and give the person closest to the problem, the accountability and the responsibility and the visibility to act effectively in the moment. And the next time you can automate that and have the machine do it for you. So we're not in RPA. We're not moving into some of those spaces that replace business process optimization. But I do think that more and more of the type of work that we solve for is how work happens in the workplace now as the result of COVID and distributing work remote work et cetera. And so that's -- when I think about the macro environment the way work has changed has been a tailwind for us.

Yes. Yes. Let me flip that a little bit differently. You start to work with partners. And the basic alerting functionality there's not a lot of services involved. But as you think about this automation you think about Deloitte and I think you recently announced was it Tata and you think about these guys, while the incident response piece is really important the automation like this is happening it's usually with the next person like collaboration is that where they're seeing the focus and the interest from those guys, or is it across the board? And how are the partnerships coming along?

I mean most of the partners that we work with are supporting customers in like big chunky digital transformation projects. Sometimes they'll employ us part of the cloud migration side of that solution. But sometimes it will be around the cultural change and the change management associated with doing work a different way not relying on people in network operations center manually watching blinking lights and escalating things et cetera. So it varies from partner to partner, but we do see that as an opportunity in the future to engage more readily with some of those more traditional systems integrators or strategy firms that are out there.

Got it. That was really helpful. Thanks and congrats.

Thank you.

Thanks, Bhavan.

Okay folks, looks like Kingsley Crane with Berenberg gets to come with the final question for the group today. [indiscernible] hands go up additionally. Kingsley, please go ahead.

Thanks for taking my question. This is Ed Magi on for Kingsley Crane. You expected to see a range of NRR between 118% to 124% and you came in at the high-end of the range here. Do you believe the higher momentum here was a function of feature adoption or seat growth? I would love to better understand the next year and if it's been different from the last few quarters and the momentum there. Thanks.

Yes. Thanks, Ed. So for us it's always a mix of factors that are driving that growth. So obviously given just the improvement that we've seen in the adoption of the digital operations plan that's been a contributor. We've seen an increasing number of PagerDuty customers adopt the PagerDuty automation of the Rundeck solution. So that's been a contributor. But the largest contributor is still use seat expansion. So we're not sold out in terms of users at any customer. So every customer has the opportunity to deploy us into another team and that certainly gets fed by if it's in dev maybe adding to IT or security or customer service. And we're also starting to see customers using us in other business type circumstances. So those are the elements that actually build into that expansion within the customer base.

Very helpful. And then another angle here. Last quarter you discussed momentum customers spending more than $500,000 and $1 million with you guys. Any color you want to share on these trends during the quarter help us further reconcile the enterprise, or is it going to be the same answer as we got for the NRR for the enterprise?

Yes. So what I will say is we're seeing good momentum above $500000 and above $1 million. But we are focusing people's attention on our key metric which is the greater than $100,000 which is -- grew by 35% year-over-year.

Helpful. Thanks very much. That’s it from me. Congrats on the quarter.

Thanks. Thanks a lot.

Thank you.

That looks like it for questions from the analyst team. Jennifer will turn over to you for final remarks please.

Well I'd like to thank all of you for joining us today and just reiterate how proud we are of the record quarter that we've delivered and how confident and optimistic we are in the outlook going forward. I personally have been involved in this business. I'm in my sixth year and I have never been more excited about the opportunity. We're really living up to the promises that we've made about being the platform that becomes the platform for engagement within our customers' environments. And this vision around the Operations Cloud is finally coming to fruition which is personally very exciting, but wouldn't happen were it not for our customers placing their trust in us and our Dutonians, our employees who work every day to re-earn that trust. So I just want to congratulate our team say thank you to our customers our investors and wish all of you a very healthy happy holiday and a prosperous New Year. Thank you.